American Investors: We Suck

A survey finds that most investors are completely clueless about investing:

More than 80 percent of U.S. investors flunked a basic investor survival skills test, showing their limited ability to translate their savings into a comfortable retirement nest egg, according to a survey released on Tuesday by investor protection organizations.
The Securities Investor Protection Corp. (SIPC) and Investor Protection Trust (IPT) said most investors failed a test of key knowledge and behavior, such as correctly defining a prospectus and checking financial planners’ backgrounds.
“This survey is a yardstick that shows us how investor education in the U.S. needs to measure up if it is going to be helpful to investors,” said IPT Chief Executive Don Blandin in a statement.
The organizations said only 17 percent of investor respondents were able to correctly answer six of eight knowledge questions and three out of four behavior questions.
Women were more likely than men to fail the investor test by a margin of 91 percent to 77 percent.
The SIPC said one of the most concerning results was that fewer than 10 percent of investors surveyed understood that no agency or organization insures them against losing money as a result of financial portfolio fraud.
“We obviously have our work cut out for us,” said SIPC President Stephen Harbeck in a statement.

Here’s the survey.

Posted by on December 13th, 2005 at 3:19 pm


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